Business Proposal
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Dear Joby Bowmen:
As you know we have been rigorously working to develop a marketing plan that suits the needs of your growing business. In our original letter to you we discussed the importance of finding your target market and better understanding the demographics of your surrounding area. Only with this knowledge are you able to coordinate the most effective promotion plan for the greatest return on your investment. Our hopes for this second letter, and at this stage in our strategizing, is to provide the 3 main areas that we consider to be essential to the success of both your marketing as well as your business.
Project a budget that is both manageable and fosters growth
Provide greater insight into your demographics
Offer our recommendations as to which marketing vehicles best suit your needs
Budget
As you well know the bar and restaurant business is an extremely competitive market, that sees many hopes and dreams come crashing down due to poor money management. This is not to imply that being conservative in your marketing budget leads to more revenue. Establishing yourself in an already crowded market can be hard and takes risks and the belief that your superior service and products will keep customers coming back. That being said we have compiled data and compared similar businesses in order to find how much of your revenue should be spent on marketing. Depending on the business, most marketing budgets fall between 1-30 % of sales revenue. Bars in particular tend to spend 1- 10% of their sales revenue. With these figures in mind we feel like 5% of your sales revenue would be an excellent goal for you to allot to your marketing. Based of the initial approximations we received from your 2 months of sales revenue below are figures that provide more insight into your budget:
Sales Revenue
September- $150,000
October- $120,000
Average monthly- $135,000
Yearly Projection- $1,620,000
Conservative Projection (.75 of proj.)- $1,215,000
Marketing Budget
Monthly- approx. $5,000
Yearly- $60,750
This is only an estimate for your budget, it will be much more detailed once more data from your opening months can be applied. However, the conservative approximations allow for a safe “buffer zone” in your expected sales revenue for the months to come. The key to make this budget work is making sure you the business owner is comfortable with this spending, and realizes the potential